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Forums - Microsoft - Is a price drop incoming for the XB1?

 

Is a price drop coming in 2014?

Yes 105 38.18%
 
No 170 61.82%
 
Total:275
Arkaign said:
Landguy said:
dangerguy said:
I love how people talk like Microsoft is going to close up shop and discontinue the Xbox One. If history is any representation look at the WiiU and the PS3. PS3 had a disastrous first year and we're very much in the midst of a WiiU turnaround 2 years into its life.

MS and their billions of dollars in the bank aren't going away anytime soon with the Xbox business. And you also have to look at the total sales of both Xbox 360 and Xbox One. They're still selling a ridiculous amount of Xbox 360's.

I agree.  No chance for M$ to jump ship on the XBox business.  THey are focusing the whole company on creating a connected OS structure and XBOX - Music/movies/games etc...  This is a big part in courting the younger audience to stick with them for the long term.  THat is why they bought Nokia's cell phone unit.  THey have to have a foothold in that arena long term.

They won't continue to burn cash on Xbox forever. Xbox OG was the foot in the door, 360 was used to grow the brand, and XB1 was intended to dominate the market, and be a paywall to all forms of living room entertainment (and focused advertising using the mandatory Kinect), along with paywalled used-games w/online check. ALL of the XB1 plans have failed.

Terrible sales globally, and virtually dead in Europe : Check

Consumer pushback on paywalls and online checks causing 180s : Check

Removal of Kinect basically stripping it's monetary value in terms of market manipulation/advertising multiplier : Check

XB1 is on track for 35-50M lifetime sales, with no added revnue sreams that they planned on. Remember Zune? I thought so. Microsoft wanted that Apple-like iTunes revenue, and tried until they gave up.

Project Xbox was around 5 to 5.5 billion in the red as of 2012 for the totality of the years from inception, with yearly profits only marginal (at the rate of the last year it would have taken something like 42 or 43 years to make back all of the losses).

Marketing and Develeoping XB1 and Kinect2 probably dumped them another 2 or 3 billion in the red. 360 revenue is decreasing rapidly. A lot of the expenses were wasted. They paid huge for Titanfall + gangantuan marketing on that deal, AND they had to compensate EA for the free copies they packed in to XB1s AND they had to reimburse stores for the $50 discount to try to get them to move AND they had a minimum 1-year agreed manufacturing deal with their Chinese makers to supply the Kinect2 that had to be adjusted after the fact. In electronics manufacturing you have to sign contracts in advance for annual production deals, it's not an a la carte deal unless you want to pay a massively higher rate. That way the mfg is guaranteed its margins, the salaries for the workers, the amortization for the books, have taxes prepared and so on. Reports also emerged that the high initial demand had them in trouble when demand fell off a cliff unexpectedly in 2014, with the supply chain overloaded, and units had to be shipped back to warehouses to be reskinned as Titanfall bundles, and to be stored long-term for the bulk overstock. All of this costs HUGE in this industry.

Microsoft is not dumb on an infinite scale. If they can't see a light at the end of the tunnel which will be worthwhile, they will give it up easily. And there's no plan for the XB1 than can make it a useful resource for them to blow a ton of money on. But, they've already bought the cow, the epic expenses are over with. Odds are what you'll see is minimal maintenance, and a steady drawing down of the expenses until cancellation. Forces within the company and from shareholders have long questioned the financial sanity of endlessly hemmorhaging funds into the effort, but were stayed by the promise that XB1 was supposed to fulfill : a cash printing press in a dominant market stance. The paywalls that were designed to make each unit highly profitable have been stripped, and there's nothing even remotely close to market dominance in XB1's fortunes.

Face it, XB1 is the end for Xbox. As projects complete, the powers that be will continually draw back expenditure until it makes sense to pull the plug.

 

Not a chance, but you'd probably liked that wouldn't you

i can't wait till sony monopolises the consoles industry and charges $500 for consoles and $80 for games and you wouldn't have shit to say cause there's no one else to buy games from....



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Nobody can monopolize the industry, for one thing Nintendo still isn't going anywhere, and nature abhors a vacuum.

Microsoft's problem is they're not built to be profitable as an also-ran, their entire corporate structure is built upon massive market penetration and dominance. The XB1 plans show that through and through. It was spectacularly ambitious, and if it had worked, Microsoft would EASILY have made back that ~8 billion in losses on Xbox.

But it failed to do so, and thus, the irrefutable fact is that Microsoft won't throw money at a loser forever. The plug will be pulled, and it's actually insane to believe that they'll continue to lose money on purpose at this point. The die is cast. Paywalls aren't coming back, the online check isn't coming back, they have less than zero chance of relevance in Europe, the best they can hope for is to not lose the US by any larger a degree as they already are. But 35-50M units sold without paywalls (and with many dual-console owners buying multiplats elsewhere), they're not going to see a cent of profit on XB1. The investors are out of patience.

First time was the promise of entering a market, got the greenlight on that.
Second time was the promise of growing in that market, got the greenlight on that.
Third time was the promise of the big payday, got the greenlight on that.
Oops, that third time went from a golden payday to a swamp of losses and failures.

There won't be a fourth time, and the Xbox will reside next to Zune and Microsoft Bob. Surface RT and Windows Phone will join soon, as mobile moves towards devices where there is less room for profit.

Microsoft, however, will continue to swim in massive profits overall from their successful Windows and Server products. Which is where their investors want their capital at work, not losing billions on stupidity and wasteful spending.



Arkaign said:
Nobody can monopolize the industry, for one thing Nintendo still isn't going anywhere, and nature abhors a vacuum.

Microsoft's problem is they're not built to be profitable as an also-ran, their entire corporate structure is built upon massive market penetration and dominance. The XB1 plans show that through and through. It was spectacularly ambitious, and if it had worked, Microsoft would EASILY have made back that ~8 billion in losses on Xbox.

But it failed to do so, and thus, the irrefutable fact is that Microsoft won't throw money at a loser forever. The plug will be pulled, and it's actually insane to believe that they'll continue to lose money on purpose at this point. The die is cast. Paywalls aren't coming back, the online check isn't coming back, they have less than zero chance of relevance in Europe, the best they can hope for is to not lose the US by any larger a degree as they already are. But 35-50M units sold without paywalls (and with many dual-console owners buying multiplats elsewhere), they're not going to see a cent of profit on XB1. The investors are out of patience.

First time was the promise of entering a market, got the greenlight on that.
Second time was the promise of growing in that market, got the greenlight on that.
Third time was the promise of the big payday, got the greenlight on that.
Oops, that third time went from a golden payday to a swamp of losses and failures.

There won't be a fourth time, and the Xbox will reside next to Zune and Microsoft Bob. Surface RT and Windows Phone will join soon, as mobile moves towards devices where there is less room for profit.

Microsoft, however, will continue to swim in massive profits overall from their successful Windows and Server products. Which is where their investors want their capital at work, not losing billions on stupidity and wasteful spending.

As much as you seem anti-Microsoft, what you wrote here makes much sense and is actually a very probable turn of events.

People say that XBox is here to stay just because MS has billions. Well, those billions surely didn't save Zune or GfWL. 



I am a realist. In the Preorder thread I argue on behalf of Xbox in that Halo MCC DEFINITELY should be ranking high in the preorder charts.

In this case though, yes, business is business, and reality is reality.

http://www.ibtimes.com/eliminate-xbox-one-bing-surface-says-microsoft-investors-1554691



Maybe a kinectless X1 with Halo MCC for $399 this holiday season.



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I doubt we will see an official price cut this year, most likely some nice bundles and perhaps retailers discounting it during the holidays. I could some bundles like this releasing

Xbox One w/Halo: Master Chief Collection+1 year Xbox Live=$399

Xbox One w/Kinect+Kinect Sports Rivals=$399



When the herd loses its way, the shepard must kill the bull that leads them astray.

Burek said:
Arkaign said:
Nobody can monopolize the industry, for one thing Nintendo still isn't going anywhere, and nature abhors a vacuum.

Microsoft's problem is they're not built to be profitable as an also-ran, their entire corporate structure is built upon massive market penetration and dominance. The XB1 plans show that through and through. It was spectacularly ambitious, and if it had worked, Microsoft would EASILY have made back that ~8 billion in losses on Xbox.

But it failed to do so, and thus, the irrefutable fact is that Microsoft won't throw money at a loser forever. The plug will be pulled, and it's actually insane to believe that they'll continue to lose money on purpose at this point. The die is cast. Paywalls aren't coming back, the online check isn't coming back, they have less than zero chance of relevance in Europe, the best they can hope for is to not lose the US by any larger a degree as they already are. But 35-50M units sold without paywalls (and with many dual-console owners buying multiplats elsewhere), they're not going to see a cent of profit on XB1. The investors are out of patience.

First time was the promise of entering a market, got the greenlight on that.
Second time was the promise of growing in that market, got the greenlight on that.
Third time was the promise of the big payday, got the greenlight on that.
Oops, that third time went from a golden payday to a swamp of losses and failures.

There won't be a fourth time, and the Xbox will reside next to Zune and Microsoft Bob. Surface RT and Windows Phone will join soon, as mobile moves towards devices where there is less room for profit.

Microsoft, however, will continue to swim in massive profits overall from their successful Windows and Server products. Which is where their investors want their capital at work, not losing billions on stupidity and wasteful spending.

As much as you seem anti-Microsoft, what you wrote here makes much sense and is actually a very probable turn of events.

People say that XBox is here to stay just because MS has billions. Well, those billions surely didn't save Zune or GfWL. 

His theories are possible, along with dozens or thousands of other outcomes.

The difference is that M$ has integrated the Xbox music/movies/digital content into all of their devices and operating systems.  This isn't just a play for the console business.  They look at it like it is a piece of their whole business plan with consumers long term.  They also recognize that it also will impact their server/office business long term too.  In just 4 short years, the ipad impacted many businesses plans to replace existing hardware and software.  People are replacing almost all business PCs with tablets and laptops.  THat's kind of the whole point behind the M$ Surface line.  When people choose a laptop or tablet, they will choose one that matches what they can use it for outside of work too.

M$ is not going to drop the Xbox, because it fits an important part of their overall long term goals.  All the Xbox has to do is break even and it creates a big win long term for M$ even if only 35-50 million people buy them.



It is near the end of the end....

No, that's not even remotely accurate on many levels.

First, businesses are not replacing desktop PCs with tablets, that's patently absurd.
Second, businesses are not overwhelmingly replacing desktop PCs with laptops, but even when they are (not often feasible due to higher cost, lower productivity due to small screens and lower reliability), they are replacing them with Windows laptops, which essentially serve the same purpose. OSX has very little footprint in the business sector.

Tablets and convertibles are consumer-level devices for the most part. Surface Pro series is interesting, I just deployed 8 of them this past week for a particularly interesting firm, but they are companions to their desktop units, not replacements. Ironically, their previous configuration was exclusively Toshiba ultrabooks, but now they have Desktops with multiple displays for in-office use, and the Surface Pro 3s for road use, already packed and ready to go, zero disconnection/hassles involved in coming/going from the office.

All that is immaterial though, the VAST bulk of business PCs sold are chosen for large firms by an IT director with consultation with the CFO and budget managers, and the individual worker has zero choice on what it's going to be. You are simply issued one, and you get what you get. We're talking large firms here : GM, Toyota, Raytheon, TI, etc. I know because I've worked for most of these firms in a consultant basis over the past two decades in that capacity.

None of that matters though, because Microsoft is a corporation that is publicly traded, and the investors themselves WILL rebel and lose confidence when XB1 losses start mounting. The patience isn't there any longer for it, the promise of a major payday has evaporated, and the 'cohesive ecosystem' they were after is being dismantled as we speak. The investors have a point, energy and capital is being expended in areas that have never shown a fraction of the profit or importance in contrast to their enterprise efforts, and continuing down the path shows no light at the end of the tunnel.

The best argument I've heard from a significant Microsoft investor can be summarized like this :

The consumer is no longer relevant to us. They are fickle, they can come and go, and the number of competitors that can capture or divert our market penetration in any consumer-facing area are many. To chase this end of business is a race to the bottom, most especially in hardware. On the other hand, enterprise and backoffice are both our primary strengths, as well as our most potent potentials for growth and supremacy as long as we invest and maintain properly. Google is a potentially deadly thread in this area, far more dangerous than any other entity on earth.

By controlling a dominant sector of the world's servers and backoffice products, in essence Microsoft OWNS the game without ever having to even have a public face or consumer products. Desktop PCs to home users can evaporate, Apple and Samsung can own the tablet game, but everything that these consumers do online, the email that they use, the encrypted cloud storage, the software and networks that their banks use, all of that can be fully dominated by Microsoft if they redouble their best talent and capital towards those ends. A race to the top, as it were.

Ironically, Apple has shown them a way in the manner of PC vs. Mac sales. Apple sells FAR FAR fewer Macbooks and Mac Pros than any of the large PC OEMs. But the BoM vs. ASP of these reflects Apple profiting HUGELY by focusing on a premium market who will pay the price.

Who will pay the price for Microsoft's premium/premier backoffice and server expertise and products? Not consumers, but the mega corps practically throw bags of cash at Microsoft for the gifts of using their products and services. Why? Because they're the best in those areas, and a better backoffice/server product enables greater data availability, flexibility, expandability, and at the end of it all : productivity vs. investment return.

It's all money.

Money thrown away on something exposed to be a downward spiral, will that continue on some hare-brained scheme to capture the minds of fickle consumers? No, it won't.

Any idiot can read a quarterly or annual report from Microsoft and see where their bread is buttered, where the threats are, and what they must do.



If they really wanted to take back NA sooner, a $50 in time for MCC would seal the deal.



Xbox: Best hardware, Game Pass best value, best BC, more 1st party genres and multiplayer titles. 

 

I still dont get why people say it already had a price drop...it didnt.
The Kinect Models still sell for $499, they just released another SKU that removed features for $399.

That said I do not think they will drop the price this year. They will probably do bundles and keep them at $399 towards the later part of the year, but those arent exactly price drops either.

Just to be clear I think Sony will do the same thing.